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kobusy [5.1K]
2 years ago
5

Red Co. uses the product cost concept of applying the cost-plus approach to product pricing. Below is cost information for the p

roduction and sale of 40,000 units of its sole product. Red Co. desires a profit equal to a 15% rate of return on invested assets of $1,200,000.
Fixed factory overhead cost $80,000.00
Fixed selling and administrative costs 140,000.00
Variable direct materials cost per unit 7.00
Variable direct labor cost per unit 11.00
Variable factory overhead cost per unit 3.00
Variable selling and administrative cost per unit 2.00
What is the markup percentage for the company's product? (Round the answer to two decimal places.)
a 30.30%
b 43.50%
c 40.00%
d 35.60%
Business
1 answer:
hammer [34]2 years ago
6 0

Answer:

b 43.50%

Explanation:

Product Cost = Variable Manufacturing Costs + Fixed Manufacturing Cost

Product Cost = 40,000*($7.00 + $11.00 + $3.00) + $80,000

Product Cost = 40,000*$21 + $80,000

Product Cost = $840,000 + $80,000

Product Cost = $920,000

Markup = Total Selling and Administrative Expenses + Desired Profit

Markup = $2.00*40,000 + $140,000 + $1,200,000*15%

Markup = $80,000 + $140,000 + $180,000

Markup = $400,000

Markup percentage = Markup / Product Cost * 100

Markup percentage = $400,000 / $920,000 * 100

Markup percentage = 0.434783 * 100

Markup percentage = 43.47%

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The financial statements of Georgi Manufacturing Company report net sales of $595,000and accounts receivable of $80,000 and $60,
Elena-2011 [213]

Answer:

43 days

Explanation:

The first step is to calculate the account receivable turnover

= $595,000/($80,000+$60,000)/2

= 595,000/140,000/2

= 595,000/70,000

= 8.5

Therefore the average collection period can be calculated as follows

= 365 /8.5

= 42.9

= 43 days

7 0
2 years ago
2. A welder and a carpenter decided to get out of the construction industry and build farm trailers instead. From building a few
Firlakuza [10]

Answer:

Answer is explained in the explanation section below.

Explanation:

Data Given:

Material Cost Per Trailer = $500

Material Cost plus Profit Per Trailer (15%)  = $500 + 75 = $575

Selling Price = $1000

Labor Cost Remaining Per Trailer = $425

Formula to Calculate the number of Trailers:

X = X1 (N^{S})

Where,

N = number of Trailers

S = Slope Parameter

X = $425

X1 = $700

So, First we need to find the slope parameter, in order to calculate the number of trailers to be built.

S = \frac{log \alpha }{log 2}

where, α = 0.85 rate of improvement.

Plugging in the values into the formula, we get:

S = \frac{log (0.85) }{log 2}

S = -0.234

Now, we can easily find the number of trailers.

X = X1 (N^{S})

Plugging in the values,

425 = 700 x (N^{-0.234})

Solving For N, we get:

N = 8.4 Trailers

N = 9 Trailers.

Hence, 9 Trailers must be built in order to realize this rate of profit.

8 0
2 years ago
Under which of the following circumstances may investment bankers review an equity research report prior to publication
Troyanec [42]

(B) To verify the factual accuracy investment bankers review an equity research report prior to publication.

<h3>What are investment bankers?</h3>
  • A financial institution's investment banker is largely responsible for obtaining cash for firms, governments, or other entities.
  • The investment banking industry is attractive because it pays handsomely.
  • Investment bankers must have great verbal and writing communication skills, as well as the ability to work long and demanding hours.
  • Prior to publication, investment bankers analyze an equities research report to ensure its accuracy.
  • Large, complex financial transactions are facilitated by investment bankers.
  • These transactions may include arranging for a client's acquisition, merger, or sale.
  • Another duty of investment bankers is to issue securities in order to raise capital.

As the description itself says, prior to publication, investment bankers analyze an equities research report to ensure its accuracy.

Therefore, (B) to verify the factual accuracy investment bankers review an equity research report prior to publication.

Know more about investment bankers here:

brainly.com/question/25787830

#SPJ4

Complete question:

Under what circumstances may investment banking personnel review an equity research report prior to publication?

A) To prevent a recommendation that may alienate a client company

B) To verify its factual accuracy

C) Under no circumstances

D) To ensure a favorable recommendation

6 0
1 year ago
Lego is considering an investment in Disney corporation. The risk free rate is 5% and the Beta for Disney is 1.2. Lego requires
disa [49]

Answer:

17%

Explanation:

This can be calculated using the Capital Asset Pricing Model which is given as under:

Required Return = Rf + Beta factor * (Market Risk Premium)

By putting the values, we have:

Required Return = 5% + 1.2 * 10% = 17%

Disney need to earn 17% return on investment to trigger a Lego investment.

5 0
2 years ago
Read 2 more answers
Splish Brothers Inc. has 9300 shares of 4%, $50 par value, cumulative preferred stock and 186000 shares of $1 par value common s
fiasKO [112]

Answer:

The dividends received by the preferred stockholders in 2017 is $24,300

Explanation:

The computation of the preferred stockholder dividend is shown below:

= Yearly dividend - dividend paid in 2016

where,

Yearly dividend = Number of shares × par value per share × rate

                          = 9,300 shares × $50 × 4%

                          = $18,600

And, the 2016 dividend is $12,900

Now put these values to the above formula  

So, the value would equal to

= $18,600 - $12,900

= $5,700

So, the total dividend would be

= Year end dividend + last year dividend

= $18,600 + $5,700

= $24,300

Out of the $64,500, the $24,300 will be distributed to the preference shareholders and the remaining amount $402,00 would be distributed to the common stockholders

5 0
3 years ago
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